Posts Tagged ‘Macy’s’

We have given considerable coverage to the attempts made by Macy’s and Nordstrom to virtually pool their inventory.  The idea is that while these firms need to carry inventory in a decentralized manner, in their brick and mortar stores as well as their main warehouses, they can still manage the inventory in a centralized manner. So, if an order is made online and the item is stocked out at the main warehouse, it can be sent to the customer from the nearby stores. The same idea applies when a customer places an order at a brick and mortar store that does not have a sufficient quantity.

During our penultimate class in the operations management course, I was discussing the benefits of such inventory pooling, and illustrating them using our recent posts. One of the students, Ryan Orr (h/t) mentioned that he recently placed an order at the Macy’s stores in Oakbrook for 10 identical ties for an important event. The store had only a limited number of ties, and agreed to order the rest of the quantity from nearby stores, and ship them directly to Ryan. As you see in the photo, Ryan got 10 ties, with 4 different patterns from 6 different stores (all in the Midwest). We blurred the receipt’s, but confirmed that all ties had the same UPC code, which means that this was not a mistake of the store in Oakbrook, the employee or the stores that the delivered the product. They all thought that they deliver the product that Ryan wanted.


Several explanations are possible:

(1) This is not a fast selling item (sorry Ryan), so over time the UPC number has transitioned from one pattern to another. Some stores carried the newer item, while other still carried the older one.

(2) It is possible that some of these stores were not originally Macy’s stores. It is possible that some of these were Marshal Field’s stores, for example, and still carried UPCs that were based on their legacy systems. We could not confirm this explanation.

(3) Loose quality control on Macy’s side. It is possible that someone accepted a shipment from a supplier to Macy’s without confirming that the shipment indeed included the right pattern.  All of these are green ties, but is it possible that someone did not notice the difference in patterns. Unlikely (?)

If anyone at Macy’s is reading and has a better (and maybe the right) explanation, we will be happy to post it.

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If you order something on-line, where do you think it ships from? If you’re ordering from Macy’s, the answer may be the local mall. The Wall Street Journal reports that Macy’s is planning to dedicate space in over 200 stores to picking and packing orders to ship to customers’ homes (Macy’s Regroups in Warehouse Wars, May 14).

The retailer plans to convert 292 of its 800-plus stores for the task, with expanded storerooms and new technology that dynamically updates the status of every item in every store. The goal is to better manage inventory.

For instance, if stores have too much of an item, the excess can be shifted to the website, where it might be selling better and at full price. Likewise, out-of-stock items won’t disappear from Macy’s website if they can be found in a physical store. Online orders will be filled by stores closest to consumers, saving time and money on shipping.

Before it started shipping from stores, Macys.com removed thousands of sold-out items from its website each week, Mr. Sachse said. When the chain carried a limited-time line from Chanel creative director Karl Lagerfeld last year, half the online inventory sold out in the first day, yet Macy’s stores had to discount the collection to get it sold, he said. If Macy’s had been able at the time to meet online demand with Lagerfeld items shipped from its stores, he said, sales would have been much better.

In the video below, the reporter gives more details.

Vodpod videos no longer available.


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